Epigenetic gene silencing has recently become an area of intensive study due to its critical functions in regulating multiple fundamental biological processes, including heterochromatin formation, transcriptional regulation, genomic imprinting, and dosage compensation. DNA methylation and Potycomb group (PcG) proteins play important roles in epigenetic gene silencing. Recent studies revealed that histone methylation also participates in epigenetic gene silencing. However, a connection between PcG-mediated gene silencing and histone methylation has not been established. The molecular mechanisms underlying epigenetic gene silencing is not very well understood. In an effort to understand the function of histone methylation, we purified and characterized several site-specific histone methyltransferases (HMTases). One of the HMTase complexes that we characterized contains several PcG proteins including EED (embryonic ectoderm development) and EZH2 (enhancer of zeste homolog), the human counterpart of the Drosophila ESC (extra sex combs), E(Z) (enhancer of zeste), and a zinc-finger DNA binding protein AEBP2 (adipocyte enhancer binding protein 2). Our preliminary studies indicate that this complex, named EED-EZH2 complex, specifically methylates nucleosomal histone H3 at lysine 27 (H3-K27). Importantly, H3-K27 methylation colocalizes with, and is dependent on, E(Z) binding to a PRE (Polycomb responsive element). Finally, we provide evidence that methylation on H3-K27 facilitates binding of PC (Polycomb) to histone H3 N-terminal tail. Thus, our preliminary studies support a working model that links PcG silencing to histone methylation. To extend this study, we have established the following specific aims: 1. Relationship between H3-K27 methylation, PRC1 recruitment, and PcG silencing. 2. Reconstitute the EED-EZH2 complex and dissect the function of individual components. 3. Define the role of AEBP2 in EED-EZH2 complex targeting. 4. Identification of EED-EZH2 target genes by genome wide location analysis. Understanding how the EED-EZH2 complex mediates H3-K27 methylation in PcG silencing will add to our 9eneral understandincj of how epigenetic silencing is achieved.